Under Armour wants to open a store at 600 N. Michigan Ave. Photo from CoStar Group Inc.

Under Armour aims to open Mag Mile flagship store

Sportswear maker Under Armour Inc. has sprinted to the head of the pack for a coveted retail space on the Magnificent Mile, where the company plans a flagship store.

The Baltimore-based company is close to leasing more than 29,000 square feet over two floors at 600 N. Michigan Ave., according to people familiar with the deal.

The space at the northwest corner of Ohio Street and Michigan Avenue became available after outdoor apparel merchant Eddie Bauer LLC closed its store there in January.

The pending deal reinforces the shopping strip's reputation as a pre-eminent destination for national retailers that want a marketing showpiece more to dazzle consumers and build their brands than to generate big profits. Indeed, Under Armour's main competitor, Nike Inc., has its Niketown store a couple blocks to the north.

'IMPORTANT STREET'

“It's the visibility. It's the traffic that's there. It's an important street,” said Alex Adjmi, president of New York-based ACSH Management Corp. and part of the ownership group of the property at 700 N. Michigan Ave. “It's important for them to be on these key streets. There are not many in the country.”

Ground-floor rents on the Magnificent Mile now can hit $500 per square foot, Mr. Adjmi said. But Under Armour is likely paying less than that for its two-story store because second-floor rents are much lower, around $100 per square foot.

“There's not many of those types of locations on the street,” Mr. Adjmi said. “When they blend up and blend space with a second floor, it allows them to make these types of deals.”

Known for outfitting everyone from university sports teams to ballerinas, Under Armour has boosted sales and profits rapidly in recent years. The retailer sells a wide range of clothing, including men's running tights that cost about $150, a female tank top that sells for $60 as well as hunting boots, soccer cleats and jackets.

The company reported $2.3 billion in revenue in 2013 and net income of $162 million, up 26 percent from 2012, according to its annual report. Last year, its shares returned 81 percent for investors, vs. a 29 percent return for the S&P 500 Index.

'BRAND-HOUSE STORES'

While most of Under Armour's retail shops are in outlet malls, more recently the company has been developing what it calls “brand-house stores” in Baltimore, New York and other markets.

Under Armour does the athletic uniforms for Northwestern.

A brand-house store, where “consumers experience our brand first-hand and have broader access to our performance products,” as Under Armour said in the annual report, is likely what the company has on tap for the Mag Mile.

The company will open these shops “one store at a time,” in “key markets where we can be strategic, places that we want to enter,” Under Armour CEO Kevin Plank told investors in a recent conference call, according to a transcript.